Dutch Parties Set Coalition, Back Cuts

By

Maarten van Tartwijk,

Robin van Daalen and

Vanessa Mock

Updated Oct. 29, 2012 5:56 p.m. ET

AMSTERDAM—The two centrist parties that won September's Dutch elections clinched a deal to form a coalition government that is likely to see the nation pursue an austerity drive at home but could herald a change of tone toward euro-zone partners such as Greece.

Prime Minister Mark Rutte of the center-right Liberal Party and Diederik Samsom of the left-leaning Labor Party agreed to balance the government budget and stick to the package of sweeping spending cuts close to those that triggered the collapse of the previous...